Companies Push Diversity Goals for Outside Law Firms

Companies like Starbucks use diversity as criteria to hire outside firms

Women filling role of legal services buyer

Law firms that want corporate business have an incentive to focus on their employee diversity: pleasing clients that demand it.

The legal departments at companies such as Starbucks and Northwestern Mutual are looking at diversity and inclusion within their own organizations and the outside counsel they hire. Their priorities could shift an industry that is still largely male and white.

Women are now the biggest buyers of legal services through the growing prominence of legal operations executives, said Connie Brenton, president and CEO of the Corporate Legal Operations Consortium, or CLOC. Brenton also is senior director of legal operations at NetApp, Inc. The role controls spending on outside firms at some of the country’s biggest companies.

Diversity is one factor that businesses consider when choosing law firms, some corporate legal executives said during CLOC’s annual institute this week in Las Vegas. Others said diversity influences yearly reviews and negotiations.

Clients are driving the conversation, Mary Shen O’Carroll, head of legal operations, technology, and strategy at Google, told Bloomberg Law. They’re working with law firms on a common goal, she said.

“It’s not just us telling firms to change,” said O’Carroll, a member of CLOC’s leadership.

Business Case for Diversity

More than a third of CLOC members said their legal departments hire outside counsel or law companies based on diversity, according to a March survey of more than 200 consortium members.

Starbucks, for example, defines diversity in its outside counsel guidelines and tries to improve the diversity of its vendors, Lisa Brown, managing director of operations and strategy for Starbucks, said at a CLOC institute panel.

The company surveys the firms it spends the most on each year to compare trends throughout time, she said. Those diversity metrics are a topic of conservation between the company and its vendors, she said.

“It’s really about fostering collaboration,” she said.

At tech company Oracle, diversity is a requirement to make the company’s list of preferred firms, Sophia Davis, senior legal operations program manager, said at a panel. It’s a part of their business review, she said.

The company also is looking at new ways to work with firms on diversity and retention issues, such as cross-mentoring initiatives or co-hosting workshops, Davis said.

Corporations Look Inward

Companies are also looking inward to address legal departments that lack diversity or face retention issues. The CLOC survey found nearly a third of departments collect in-house diversity metrics.

Data helps make a business case for improvement as well as break silos throughout companies, said Anna Brown, director of global diversity and inclusion for law firm Baker McKenzie.

“It’s got to be in everything that we do,” she said.

Northwestern Mutual, for instance, partners with HR to hire from diverse candidate pools, Lisa Brzycki, the company’s director of legal operations and technology, said during a panel. The company also works with a program to sponsor diverse law clerks, she said.

A CLOC diversity initiative to help the legal operations industry work together on best practices is gaining steam, CLOC’s Brenton told Bloomberg Law. The interest comes from years of conversation that needs action, she said.